Consumer law: New Regulations Introduced

The Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013 have been laid before Parliament and will come into force on 13 June 2014. The Regulations implement the final parts of the EU’s Consumer Rights Directive.

The key changes which will come into effect as a result of the Regulations are:

Information Requirements - Traders will be required to provide certain information to the consumer before they enter into a contract and, in off-premises (i.e. at the consumer’s home) or distance (i.e. telephone/internet) transactions, will be required to provide the consumer with a copy of the contract.

The purpose of the information requirements is to make transactions more transparent for the consumer. So, for example, traders must give details of the costs of the goods or services (or an estimate where a definite cost cannot yet be provided), any additional charges, delivery costs, and the arrangements for payment and delivery. Traders will also need to provide details of their complaint handling policy where applicable and details of any after-sales services or guarantees.

In off-premises and distance contracts there are additional requirements, such as details of the right to cancel (provided by consumer regulations), the trader’s return policy, and details of any codes of conduct which apply to the trader or of any supervisory authority to which they are subject. A cancellation form must also be provided where the right to cancel exists.

For on-premises and distance transactions, this information can be “made available to the consumer”, meaning that it must be reasonably easy to access it. In off-premises transactions it must be “given” to the consumer, meaning that the trader must actively provide the information (hand it over) as opposed to making it generally accessible.

Where transactions are concluded via distance means, traders must make certain information clear to the consumer before the ordering process is completed. It must also be made clear that, when placing an order – for example by pressing a button on a website – the consumer is entering into an obligation to pay the trader. If the trader fails to do this, the consumer will not be bound by the contract.

Cancellation Right - As under the Distance Selling Regulations and Doorstep Regulations, consumers will have the right to cancel a contract which is entered into via distance means or away from the trader’s premises. The cancellation period has been increased from 7 working days and 7 calendar days (respectively) to 14 calendar days.

This cancellation period is extended if the trader fails to provide the consumer with the prescribed information as to their right to cancel. The extension period has also been increased to a maximum of 12 months and 14 days from delivery of the goods.

If the consumer cancels, they will be responsible for returning the goods. Who pays the costs of the return will depend on the trader’s terms and conditions. The refund to the consumer can be reduced where they have “handled” the goods and reduced the value as a result. The trader must make the refund, including the cost of standard delivery, without undue delay and no later than 14 days after cancellation (for services) or the date of receipt of goods.

There various exceptions to the right to cancel which continue to apply. For example, there is no right to cancel for passenger transport services, off-premises contracts for no more than £42, specialist or personalised goods, various food/drink goods, and sealed audio/video goods or computer software which have been unsealed.

Other Changes

Additional payments – the consumer’s express consent will be needed for additional payments. Default tick boxes on forms/websites will not qualify as express consent.

After-sales communications – telephone numbers for after-sale services/customer support must either be a geographic number, mobile number, a free number or – if another number is used – the charge may not be greater than the standard rate for a geographic number.

30 days default delivery time – unless otherwise agreed, the default time for delivery of goods will be within 30 days.

Passage of risk – risk in the goods will pass to the consumer when they come into their physical possession or that of a person identified by the consumer.

Enforcement – New, more robust enforcement measures have been introduced for traders who fail to comply with the regulations.

It will be vital for traders to ensure that their terms and conditions – particularly in the case of e-commerce transactions and/or doorstep selling – comply with the new regulations in time for their implementation on 13 June 2014.

If you would like further information and advice on the contents of this article, please contact a member of our commercial team.